Weathering the Economic Storm as a Small Business

I was making a presentation to my networking organization this week, and was asked what I was seeing in terms of what is happening to small businesses, or how they are reacting to the economic situation. I immediately have two responses to that question.

Riding the Waves of Cash Flow

First, cash flow is the problem. People are busy. They have work and projects, but money is flowing slowly in drips and drabs. People are taking much longer to pay, paying partial, and asking for discounts.

The positive side to this is that people are creating new alliances, and seeing that cooperative relationships are working rather than competitive ones. As small businesses, we are interdependent upon the business ecosystem. We provide services or products and have people provide us products and services. If there is an interruption in that cycle we are at an imbalance and disadvantage. 

While we are all nervous and frustrated, those who are able to work cooperatively with others as a team on the same ship in this storm have the greater chance of success. Chaos forces the building of alliances larger than your own business. We need each other to survive, and those with whom I am able to build cooperative relationships with in difficult times will be those I continue to work with when the waters are smoother.

We are seeking certainty now, which at the moment is difficult to find. As a small business, I am eager to work with you to re-negotiate an agreement if needed, if we build trust and can know that the re-negotiated agreement is solid. 

For example, a client received 35 cents on the dollar for work completed. Reaching out they came to understanding each other’s situation and intent better. This strengthened the trust they had initially developed, and they understood what was needed to get full payment, and importantly when to expect it – diminishing uncertainty. While the principal depends on payment from the client before paying the sub-contractor, there is a new communication and cooperative relationship between both parties with an understanding that going-it alone will not get you through this storm.

Bracing Against the Winds of Uncertainty

The second response was about uncertainty - uncertainty as to when, how, and how well the stimulus initiatives will take effect. And will we, when they start to have an effect, go back to the same thinking that got us into much of this situation in the first place? It was Einstein who said that we can’t solve the problems by using the same kind of thinking we used when we created the problems.

Business is happening. Certainty is a requirement for growing a business. I know lots of businesses that are busy while experiencing cash flow problems. But the future is uncertain, and as a result there is anxiety and frustration. I talk with business owners expressing anxiety with uncertainty who feel they are alone with this concern. But know this: YOU ARE NOT ALONE.

Uncertainty is prevailing, and as a result we are all being conservative in our behavior. But despite the doom-and-gloom messages in the media and the uncertainty, business IS happening. To weather the storm focus your energies on what you CAN do to keep moving forward, focus on your cooperative and mutually beneficial relationships, and keep on keeping on. The storm will not last forever.